Luxury E-Commerce Matches to Go Into Administration After Acquisition by Frasers

British luxury e-commerce site Matches is set for an administration filing, about two months after being acquired by the Frasers Group led by Mike Ashley.

Frasers Group has been attempting to restructure this loss-making retailer since last December when it acquired it for 52 million pounds. At the time, the group praised the relationship between Matches and its brand partners, and the acquisition was seen as an important part of the new owner’s ongoing strategy to high-tier the company.

However, the group revealed on Friday that since the acquisition of Matches, it has consistently missed its business plan targets and, notwithstanding support from the group, has continued to make material losses. They said, “Whilst Matches’ management team has tried to find a way to stabilise the business, it has become clear that too much change would be required to restructure it, and the continued funding requirements would be far in excess of amounts that the group considers to be viable. In light of this, Frasers has been informed that the directors of Matches have taken the decision to put the Matches group into administration. Frasers remains committed to the luxury market and its brand partners”.

Matches, which sells luxury goods and designer brand merchandise, was founded over 30 years ago by Tom and Ruth Chapman as a retail store in Wimbledon, southwest London. They have since expanded the store, but at some point shifted their focus to an e-commerce website targeting international sales. In 2017, the Chapmans sold a majority stake in the business to private equity group Apax Partners, then sold the business to Frasers Group.

Match’s currently has a flagship store in Mayfair and two locations in London offering personal styling advice. On the other hand, the company’s main profitable part is not its physical stores, but its online sales to 176 countries abroad.

According to information from insiders, Matches has been demanding discounts from its suppliers in recent weeks.

Catherine Shuttleworth, chief executive of retail analysis firm Savvy said, “It appears that the issues at Matches were more significant than Frasers first thought. Consumer confidence remains fragile and even luxury clothing shoppers are changing purchase behaviour. We know that 74% of shoppers are cutting back on the number of clothes that they buy.”

Insiders suggested that the most likely result is that Frasers will seek to retain control of the business through a pre-bankruptcy transaction, but it is not known whether that will continue.

Although Nick Bayton, who oversees Matches and was instrumental in stabilizing the company’s performance after a change in CEO and a downturn in earnings, also does not know what his future will be for now.

In recent years, luxury e-commerce retailers have experienced a sales slump, with Farfetch being acquired by South Korea’s Coupang last year. Subsequently, Farfetch founder José Neves announced his retirement. Similarly, Yoox Net-A-Porter has faced financial difficulties over the past few years, and the heyday of luxury e-commerce is coming to an end.

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